Prometeia and Indigita joined forces recently to host an event centered around «ESG Regulations and Best Practices in the Swiss and EU Markets». This article delves into the event's key themes, uncovering valuable insights that can reshape the future of investment advisory.
What are the key aspects of the EU’s ESG regulations and how do they impact financial institutions?
Michele Leoncelli, Senior Partner at Prometeia, highlighted the key aspects of the EU's ESG regulations during the event. He specifically focused on the EU Taxonomy Regulation and the Sustainable Finance Disclosure Regulation (SFDR). These regulations have a profound impact on corporates and financial institutions.
They prioritize ESG factors in sustainable practices and investment activities, demanding transparency through disclosure, integration of ESG considerations and preferences, and comprehensive reporting. By establishing a robust regulatory framework, the EU ensures accountability in advisory practices, safeguarding the interests of investors and consumers alike.
Swiss ESG regulations: a market self-regulated philosophy that could shift more towards EU’s approach?
Achille Deodato, CEO of Indigita and Partner of BRP Bizzozero & Partners, introduced the ESG regulatory framework in Switzerland. He highlighted the different approaches adopted by Swiss authorities and regulatory bodies, which rely to date on market self-regulation.
Management of ESG remains framed within the existing governance and due diligence rules. A change of approach may still be possible, bringing Switzerland closer to the EU approach.
How can sustainability be effectively integrated into their investment advisory workflows?
Carmine Cammarota, Country Head of Switzerland for Prometeia, shared insights during the event on practical ways financial institutions can integrate sustainability into their investment advisory workflows. He emphasized the significance of efficient Know You Customer (KYC) processes and client profiling in aligning investment strategies with clients' ESG preferences.
Additionally, robust data management services, including ESG mapping, scores, and analytics, were highlighted as crucial tools to support decision-making and portfolio monitoring. Among these tools, the Synthetic Sustainability Indicator (SSI) stood out as a powerful metric, combining various ESG indicators for comparative analysis.
The Swiss Climate Scores are another valuable resource to assess climate-related risks and opportunities. Ultimately, the key to a successful ESG integration lies in proper data management.
What are the challenges faced by wealth managers in implementing EU regulations?
Nicolas Barben, Global Head of ESG Solutions at UBP, addressed the challenges faced by wealth managers in implementing EU regulations during the event. He stressed the need for a comprehensive governance structure, underpinned by robust IT systems, data management, investment strategies, risk management, and legal and compliance frameworks, among others.
Wealth managers must align their investment offerings with regulations, considering ESG risk factors, reducing negative impacts, and promoting sustainable investments. Integrating clients' preferences and accurately measuring adverse impacts are crucial steps toward success.
Barben emphasized that as the regulatory landscape evolves, refinements in regulations, guidelines, and reporting standards will address emerging challenges, instilling clarity and confidence among wealth managers and investors.
What were the key findings from the Swiss Sustainable Investment Market Study 2023?
Jean Laville, Deputy CEO of Swiss Sustainable Finance and Partner at Conser, presented a study on the Swiss Sustainable Investment Market in 2023. The study uncovered a growing demand for impact-related investments and an urgent need for transparency in sustainable practices.
However, it also highlighted that only a small portion of investment categories demonstrated higher ambition levels, emphasizing the importance of elevating ambition across a broader spectrum. Laville then underlined the necessity of transparent measurement of ESG and impact performance to enhance accountability and investor understanding.
How can financial institutions navigate the evolving ESG landscape and reach their sustainability goals?
The conclusions drawn from the event were not only impressive but also eye-opening, shedding light on the strategies financial institutions, and in particular wealth managers, can employ to navigate the evolving ESG landscape and implement sustainability within their advisory workflows.
To successfully implement ESG regulations, financial institutions should focus on key pillars: defining the ESG strategy, establishing effective internal control and reporting frameworks, addressing client preferences and sustainability goals, relying on independent data providers, providing staff training on ESG principles, and deploying suitable instruments for sales and monitoring.
By embracing these pillars, institutions can navigate the evolving ESG landscape and achieve sustainable outcomes that benefit both their business and the planet.
